Solving the Wall Street Financial Crisis: Monetary Reform
David Lombard
|
This is the sanest and siplest solution to the money
crisis that I have yet heard. It solves the problems of the mortgage crisis,
and stabilizes the economy painlessly for We The People. JFK proposed
something like this back in '63.... just before he was shot. This idea really
needs to go viral. If any of our selected officials are actually honest and
just dupes, they need to see this and perhaps have it explained to them.
Please pass this one on. Solving the Wall Street Financial Crisis: Monetary Reform
Einstein correctly observed that you cannot solve a problem with the same consciousness that created the problem in the first place. This "financial crisis" is an opportunity to correct the problem at its source. As I listen to the wrangling on Capitol Hill I wonder why it is that no one has proposed the most obvious solution. We can all agree that speculators do not produce anything of value or contribute to a productive economy. If, as Henry Paulson and George Bush insist, the "credit freeze" prevents legitimate businesses from operating and qualified borrowers from having access to credit for student loans and mortgages, let’s examine the source of that credit freeze ~ private lenders. Thomas Jefferson successfully overcame the relentless privatization schemes of international financiers by nationalizing the banking system and restoring the function of currency and credit creation to the US government, just as our Constitution mandates. Our country has been in the grip of a private monopoly on public credit since 1913. The constitutional authority to create money and issue credit rightfully belongs to the government ~ not to a private cartel of international financiers. The US government can issue its own legal tender and issue credit to legitimate businesses and qualified borrowers to restore a prosperous economy.
A government lending institution could be established to refinance the loans of defaulting homeowners at reasonable fixed rates, allowing families to keep their homes and stabilizing the real estate market. As you must be aware, predatory lenders hiked up the interest rates on ARMS 14 points within two years! House payments doubled and sometimes tripled! These homeowners were not "sub prime" borrowers. They were victims of usury and fraud. Banks could easily have readjusted their loan terms but they chose to foreclose, destroying home values in every state in the country and wiping out the only real asset of the middle class. The same predators are now demanding bailouts! Government-issued credit to refinance these loans would undoubtedly be far less expensive than the $700 billion Goldman Sachs is demanding, plus the $85 billion AIG is demanding, plus the bogus "securitized" debts of Fannie May and Freddie Mac, plus the trillions of dollars in worthless derivatives contrived by Wall Street gambling casinos. We do not need to reimburse gamblers for their losses. We need to provide new money and new credit to responsible and productive individuals who contribute to our economy. Reclaiming government authority to issue credit would solve the problem now and forever.
Being stampeded by the perpetrators of fraud will exacerbate the crisis. We need to shift our focus to creating a new financial structure. The Secretary of the Treasury has historically been in cahoots with Wall Street hustlers and does not serve the US government or its citizens, as Goldman Sachs CEOs, Henry Paulson (and Robert Rubin) so aptly demonstrate. He would have us rush into a legally-binding contract that would give him unprecedented powers over the economic and financial life of the US forever. Section 8 of Paulson’s plan states: “Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.” RED FLAG! Paulson is a member of the International Monetary Fund Board of Governors, the nexus of predators that bankrupted Argentina in the blink of an eye. Like so many IMF victims, Argentina was strategically gutted by crippling debt, radical deregulation and privatization schemes. Fed Chairman Alan Greenspan and free market buccaneer Milton Friedman applauded the carnage as the lifeblood of one nation after another was sucked dry by roving vampire capitalists. We are next ~ unless we see to root of this "financial crisis" and protect our country.
The Federal Reserve System is not federal and has no reserves. It is a privately-owned bank consortium that creates public debt and feeds on taxpayers ~ a Ponzi scheme. It cyclically engineers bubbles and depressions by arbitrarily expanding and contracting its credit and reducing the public's purchasing power by steadily inflating its fiat “notes.” In essence, this is a debt pyramid scheme that enriches a cartel of international financiers at the expense of society. The cycles of global economic dependency and despair will continue until this debt monopoly is banished.
In 1934, Congressman Louis McFadden, Chairman of the House Banking and Currency Committee, described the cabal of world bankers who hijacked our monetary system in 1913. He stated on the Congressional record:
"Some people think that the Federal Reserve Banks are United States Government institutions. They are private monopolies which prey upon the people of these United States for the benefit of themselves and their foreign customers; foreign and domestic speculators and swindlers; and rich and predatory money lenders. In that dark crew of financial pirates there are those who would cut a man's throat to get a dollar out of his pocket; there are those who send money into states to buy votes to control our legislatures; there are those who maintain international propaganda for the purpose of deceiving us into granting of new concessions which will permit them to cover up their past misdeeds and set again in motion their gigantic train of crime. These twelve private credit monopolies were deceitfully and disloyally foisted upon this Country by the bankers who came here from Europe and repaid us our hospitality by undermining our American institutions."
In his 1899 book, The History of Money in America, the great monetary historian Alexander Del Mar, described the catastrophic error made by our “Founding Fathers.” While the Constitution assigns the function of money creation to the federal government, it does not explicitly describe the mechanism for issuing currency and credit, leaving that function open to predators:
"Never was a great historical event [The American Revolution] followed by a more feeble sequel. A nation arises to claim for itself liberty and sovereignty. It gains both of these ends by an immense sacrifice of blood and treasure. Then when victory is gained and secured, it hands the national credit - that is to say a national treasure over to private individuals, to do as they please with it! ... Americans of the revolution had before them ... the historical examples of Greece and Rome . In all these states the main contention from first to last between the aristocratic and popular factions arose out of and centered in the monetary system; that greatest of all dispensers of equity or inequity. They had only to take care that the seed they planted was genuine and uncontaminated. Nature was certain to do the rest. Well they planted; and now look at the fruit and see what it is that they planted! They planted financial corporations ... they planted private money ... they planted financial exemptions from public burdens...In a word they planted another revolution."
This is the moment to correct the catastrophic error of our Founding Fathers. Government control of our monetary system is fundamental to our freedom and our national sovereignty. It is fundamental to permanent economic stability and genuine productivity. Deep and lasting monetary reform requires that we establish a government mechanism for creating money and issuing credit.
Money is a legal fiction which derives its value from social consensus. Legal tender does not require commodity backing, such as gold or silver, but only social agreement that it can be used as a medium of exchange. Publicly-owned credit issuing mechanisms can be created as a non-profit public service or the interest on loans can be used to finance government in lieu of taxes. Publicly-owned mechanisms would keep money circulating as a convenience that facilitates the exchange of goods and services and would reward productivity by making investment capital available to legitimate businesses that serve society.
Attorney Ellen Brown, historian Stephen Zarlenga and economist Michael Hudson have documented historical precedents for US government-owned monetary systems with blueprints for implementing the mechanisms ~ which, by the way, were very successful in colonial times, flourished again under Abraham Lincoln, and would have been restored by John F. Kennedy with Executive Order 11,110, had he not also been assassinated. And right there on Capitol Hill we have Ron Paul (R-TX) and Dennis Kucinich (D-OH), both of whom have studied our monetary system in depth and are willing to introduce legislation that would restore our financial sovereignty. So what’s the mystery about solving the “financial crisis”?
The Chinese pictograph for crisis is also the symbol for opportunity. Wall Street hustlers have brought our country to the edge of financial collapse once again. But with the whole nation focused on the need for deep reform we can seize this moment to create a genuine legacy of freedom for future generations ~ a new monetary system wholly owned by the People of the United States. Carpe Diem!
Nikki Alexander Ventura California |
Chuck
the open so no one will discover it. And if anyone does (like Abe
Lincoln) -- and attempts to implement it -- they usually end up dead
within a very short time.
One aspect of 9/11 that doesn't get a lot of attention is the fact
that it was a HUGE debt trigger. In the years since 9/11, our national
debt has skyrocketed. And almost all of this increase (until the
current bailout binge, causing more of the same!) has been the result
of dubious military expenditures justified by the "war on terror."
Most of the interest from this debt (we are now paying more than half
a trillion per year) is flowing into the pockets of creditors who have
no more interest in the long-term well-being of America than the
perpetrators of 9/11. They may even be on the same team... (Duh)
Here's a link to a short research report I wrote recently that details
the concept of debt-free currency and explains why it is SUCH a good
idea -- and also why it is such a threat to those who currently have
us by the you-know-what.
http://www.truememes.com/debt_free.html
David -- take a look at this article if you have a chance and let me
know what you think!
Thanks,
Chuck
cbrouillet
week and just posted this on my blog: (see http://www.communitycurrency.org/9-11.html#UP
for the live links)
According to Rep. Michael Burgess from the 26th District in Fort
Worth, Texas martial law (a procedure in Congress to bypass normal
procedures to hasten passage of legislation) was declared over the
weekend and Congress is really being forced to pass the Bailout,
before it has been written, read, understood. It is probably opposed
by everyone, except those few who will get a piece of the pie. I did
call and write to Eshoo urging her to oppose the bill, but I'm not
surprised that she seems to have already casted her lot in with
Pelosi, Bush and the rest of the gang hellbent on looting the country.
[Hey, I just heard that the bail-out was defeated! There is hope!]
Last weekend the American Monetary Institute held their annual
conference in Chicago. They also posted their reaction to the
criminally insane $700 billion proposed grab.
While I doubt if everyone in the country is ready to pause, sit still,
and listen, it is certainly time for people to begin thinking about
what is wrong with our financial system, how it works, what is money,
how we could improve the system. I suppose the rush to push
700,000,000,000 into the pockets of those who have created the current
crisis is to insure golden parachutes for those ready to skip the
country to avoid the wrath of the American people and the world. While
the likelihood of honest elections are remote, there is a chance of
massive voter revolt at both the Republican and Democratic parties for
their participation in the trashing of our Constitution, the illegal
wars, and the economic havoc.
Our institutions- like the government and the media- have lost so much
credibility, however, I doubt that anyone would trust them to come up
with any sort of real reform to solve the problems that they have
gotten us into. The only hope is ousting the incumbents, holding them
accountable for their crimes, and finding some courageous, honest
people willing to tackle the mess that they have made, including the
financial debacle.
Next week I will be doing a radio show on Rethinking Money with Mike
Nickerson, author of Life, Money & Illusion- Living on Earth as if we
want to stay.
Mike wrote to me this morning:
I'm looking forward to the opportunity to address the crisis... One
can only speculate productively for a while, but we need vision of a
destination if we are to have hope of getting there.
Below is an article I recently wrote on the issue.
A Silver Lining to the Economic Downturn
by Mike Nickerson
An alternative to panicking when GDP stops growing is to view it as a
sign of maturity.
Human activity cannot expand forever on our finite planet. An economy
growing at 3% a year doubles its size every 24 years. Centuries of
such growth have brought us to a mature size. As with individual
maturity, there comes a time for societies to stop growing and to take
responsibly for their strength and impacts on others.
As a mature species, we have two responsibilities to Earth and
ultimately, to ourselves. The first is to live within the availability
of natural resources. Global production of oil has stalled for three
years at about 85 million barrels a day, yet demand continues to
increase. This results in rising prices. The increased cost is
reminding us all about how dependent we are on this particular
resource.
While fossil fuels are a well-known resource issue, there is also
cause for concern with fresh water, forests, fish, soil fertility and
other resources.
Our second responsibility is to keep our waste within tolerable
bounds. Climate change is a direct result of human activity having
grown to where our C02 emissions are overwhelming the ability of
oceans and forests to absorb it, leaving it to accumulate in the
atmosphere. What is the logic of policies aimed at doubling our size,
when current activities, at the present population level, have already
brought us to the edge of climate chaos?
Climate change is not the only issue related to tolerance. Respiratory
problems, many cancers and other illnesses, which result from the
accumulation of manufactured toxins, are also wake up calls.
The sub-prime mortgage crisis rivals the price of fuel and climate
change in terms of public concern. It too can be linked to
confrontation with planetary limits.
Over the centuries, the expansion of our growth-dependent type of
monetary system has inflated it to gargantuan proportions. In North
America, to accomplish 3% growth, over four hundred billion dollars in
new business has to take place in the present year. This is over and
above the fifteen trillion dollars worth of transactions already
taking place. Large amounts of new money has to be loaned into
existence to accommodate this expansion.
Before humans filled the Earth, there were areas of untapped natural
resources, from which we could produce things of tangible value that
people were willing and able to pay for - businesses, houses, tools,
food and the like - to back up an exponentially expanding money
supply. By the 1980s, it was becoming increasingly difficult to
produce enough real wealth to do the job. Following "junk bonds," and
the DotCom bubble, bidding up real estate became a primary means for
expanding the money supply. When that bubble threatened to burst after
9/11, interest rates were dropped to almost nothing and mortgages were
offered to people with no down payments and little credit worthiness.
At hundreds of thousands of dollars each, great quantities of money
were loaned into circulation. It appeared to work, until energy driven
inflation prompted interest rate increases that many sub-prime
mortgage holders were unable to pay.
These problems indicate that the time has come for a fundamental
change. Fuel prices, climate change and the sub-prime mortgage crisis
are all symptoms of one cause. They will not effectively be resolved
until the fact that human activity has grown to stretch planetary
limits is addressed. We cannot grow out of problems that result from
our size.
When we stopped growing as individuals, it was not the end of the
world. Indeed, for most of us, life had scarcely begun before physical
maturity. Even as physical growth ended, we became better informed,
more comfortable in ourselves and we developed the skills and
relationships that define our lives. The same can be true for
civilization.
Among the first things societies can do, as we acknowledge our
maturity, is to shift investment into education and health care.
Unlike cars and expanding highway networks, which are resource and
waste intensive, education and health care (particularly care at the
preventative level) consist almost entirely of knowledge and good
will.
Another step will be to revive local, small-scale agriculture. Food
produced in this way requires less fuel and other natural resources
and has been shown to produce more food per acre, of a higher
nutritional quality, than industrial scale farming.
Investing in education, health care and local food security makes
sense, if what we want is a healthy, well fed, educated population.
With the present commitment to make money grow, however, such goals
appear self-serving. Our advanced size requires that all our efforts
be focused on monetary expansion.
Do we want to grow money or food? As long as our goal is defined as
making the GDP grow, efficiency will be measured entirely in terms of
what makes the most money. Even though industrial agriculture produces
less food per acre, than small-scale local framing, it does produce a
greater crop of investment capital. Money borrowed for heavy
equipment, fuel, pesticides and fertilizer earns interest and, driven
by payment schedules, stimulates efforts to maximize financial return.
Local farming, on the other hand, contributes relatively little to the
immediate need of expanding capital. It tends to put money into the
pockets of farmers who, rather than investing it, are more likely to
buy food, shelter and education for their children.
When industrialization began, it was recognized that mechanized, mass
production could provide products at a fraction of the cost of hand-
made goods. The main obstacle to applying the industrial process to
all manner of goods was a shortage of capital. Because it costs a lot
of up-front money to build an industry, our system of mutual provision
(the economy) was designed to encourage the expansion of capital.
However, now that the world is awash in so much capital that, a
continuous stream of speculative bubbles is necessary to give it
places to invest, it is time for another goal.
As we mature as a society, the things that indicate well-being change.
Measuring how much a baby grows is a good measure of its health; it is
not an effective way to measure the well-being of an adult. If we want
to resolve today's multiple crises, we need more detailed
information.
At present, if there is a natural disaster, toxic spill or a health
epidemic, the costs of dealing with the problems are added to the GDP,
giving the false impression that we are better off. While more money
might be flowing, life is degraded by such things. If we were to
measure social and environmental factors of well-being with the same
authority and enthusiasm with which we measure GDP, much of the
confusion would be avoided. A Genuine Progress Index (GPI) would
provide a broader spectrum of information, enabling the costs and
benefits of different activities to be assessed with greater accuracy.
Along with the traditional economic indicators, accounts about air
quality and health issues, for example, would reveal that the hundreds
of millions of dollars spent annually on medicine to relieve
respiratory suffering is more a sign of distress than of economic
progress.
A legitimized indicator that shows whether social and environmental
factors are improving or deteriorating would create the awareness
needed to stimulate serious actions toward solving the problems.
By identifying resource draw-down, pollution, and disruptions to
communities, with a GPI, external factors would enter the picture.
Presently externalized costs are not included in the price of goods.
When such costs are added to production costs, those goods that are
socially and environmentally friendly would be less expensive and
those that cause problems would cost more. Both consumers and
producers would then be inclined toward responsible products.
Taking the additional step of shifting the skill, ingenuity and
persuasive effort that is presently applied toward engineering
obsolescence, and, instead, using it to design durable, easily
repaired goods, and to reclaim pride in objects that have long served
us, could cut up to 50% off of our material and energy consumption and
consequent impacts.
One final shift - from looking for fulfillment in material goods, to
seeking it in friendships, knowledge, appreciation, service, music,
art, sport and adventure - would complete the transformation. Coupled
with environmentally responsible agriculture, such a change could
reduce our impacts to practically nothing. That is, the real costs of
maintaining well-being for humans, in terms of the ability of Earth to
sustain life over time, would be negligible.
By finding satisfaction in the richness of being human, we could
change the image of our species from that of a potentially terminal
blight on the Earth, to something much more suiting to our position
amidst the life of this planet. As a mature species, we could reward
three billion years of evolution by adding laughter, love, awe and
wonder to a deep appreciation for the incredible accomplishments by
which life has brought us to this point.
While arguments persist about oil supplies, climate change and the
possibility of perpetual economic expansion, we are well advised to
acknowledge the ultimate finiteness of Earth and accept
responsibility. Policies intent on expanding until the last possible
moment will almost certainly be followed by disaster.
Human ingenuity is more than sufficient to provide food, shelter and
other necessities without having to double the total of all our
activities every 24 years. It is a Question of Direction. We need to
choose between the goal of perpetual growth and that of long-term well-
being.
We celebrate when our children grow. If an adult continues to grow
like a child, however, it is cause for serious concern. Developing a
healthy steady-state economy is no more frightening than the prospect
of becoming adult is for a teenager. The silver lining to this
economic downturn is the opportunity it offers to grow up and take
responsibility for our impacts. It can be done.
***********************************************************************
I am really amazed that the system has lasted as long as it has, but
it has only been able to do so through fraud and complicity of the
government at the very highest levels, rewriting laws to allow the
financial sector to oversee itself and come up with ever more complex
schemes to lure money into its grasp. All the money on the planet
multiplied ten times couldn't come up with enough money to cancel all
the debts that have been wracked up. I wrote- Reinventing Money,
Restoring the Earth, Reweaving the Web of Life over a dozen years ago,
but it still is a valid criticism of the monetary system and points
towards local, regional, national, and global approaches towards
needed systemic change.
Having spoken with numerous people who have studied money in depth,
written many books, and who have come up with various ideas for
change, I do realize that there is no one size fits all, magic bullet
scheme to solving the current crisis. Money is basically an agreement,
and it can be backed by brutal military force, or a spirit of
cooperation and completely voluntarily. Ideally, it should be simple,
clear, just, transparent, serve everyone's needs- which is the
opposite of our current system which few people understand, relies on
deception, and secrecy, concentrating wealth and power while
destroying the Earth in the process.
I think the biggest challenge facing us is that so many misconceptions
have to be unlearned, in order for people to grasp the reality of what
money actually is today. We also must recognize our ability to change
the system, and the need to reinvent money, so that it serves, rather
than threatens, all of Life and humanity.
jfe...@aol.com
Remember! It's not the fact that our currency is not tied to precious metal! It's the fact that private bankers are charging HUGE interest. It's called USURY and was punishable by death a few hundred years ago. We've got to shut down the privately owned federal reserve bank and insist that Congress do their job and issue currency WITHOUT INTEREST!
It's easy to do; however, as you know, at least five (5) Presidents tried doing this -- Lincoln, Garfield, and Kennedy! 1) Andrew Jackson (Survived); 2) Abraham Lincoln; 3) James Garfield; 4) William McKinley; 5) John Kennedy. So, I guess it's not as easy as it looks!
Nevertheless, we should not look to back dollars with gold as the TRILLIONAIRE MEMBERS OF THE RULING ELITE possess most of the gold in the world. It wouldn't work unless we could take it back from them! I don't think they're just going to hand it over!
In a speech before Congress in 2002, entitled Abolish the Fed, Ron Paul said:
— “Abolishing the Federal Reserve will allow Congress to reassert its Constitutional authority over monetary policy. The Constitution does not give Congress the authority to delegate control over monetary policy to a Central Bank. I urge my colleagues to put an end t o the manipulation of the money supply which erodes Americans’ standard of living and enriches well-connected elites.” —
If we get rid of the Central Bank, we get rid of the "business cycle" that seems to just happen automatically about every ten years. Well, remember this, it's NOT a normal event! It's a structured event created by the private owners of the central banks. Listen to Dr. Michael Hudson! He stated that all "booms" are created by the central bank by creating the EASY availability of credit. Once the economy reaches a certain point and the private bankers have made a ton of money (remember, too, they know when the interest rates will go up or down and when credit will be easy or hard to get -- they CONTROL IT for god's sake!), the private bankers put a strangle-hold on credit, force thousands of businesses into bankruptcy (e.g. Bear Stearns, Countrywide, etc.) and then buy them up at pennies on the dollar. The rich get richer and, well, I'm not in that category!
Study this! We are CONTROLLED by private bankers! Study it!
Good luck!
RICK ERNST
jfe...@aol.com
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